Improve Profitability - Train Your Service Manager

How much formal training has your service manager had?   He heads the department that generates most, if not all, of the profit in your dealership.  If he is poorly trained, your company could be losing both revenue and profit that would make a difference in your bottom line.

The Best Investment You Can Make

If you want your customers to be happier, your technicians to be more effective, and your service department to be more profitable, training your service manager is the place to start.

There are many subjects he needs to understand :

• How to be a leader that his team will follow and support
• How to motivate his team
• Why not everyone responds to the same motivation
• How to identify and hire the right people
• How to analyze service data to identify issues and resolve them
• What a service call really costs
• What is the most important metric and why
• Where the service department fits in the financial model

If your service...

At one time or another, every service manager has to deal with a technician wanting more money. The service manager is faced with a difficult situation when senior management resists. When I was a service manager in California, the dealer I worked for would let a technician leave when a $.10 per hour raise would have kept them with the company. As a service manager, it was very frustrating, and to combat that, I sat down and worked at computing what it costs to hire and train a technician. Every service manager should work through this exercise.

Cost of Hiring

Recruiting Cost

The first cost associated with hiring a replacement is the cost of recruiting. This would include the cost of advertising, using an outside recruiter, and the cost of the manager’s time to review resumes and interview applicants. Research shows that this cost can run from $2,000 to $5,000 dollars or more. To be conservative, we will use a cost of $2,500.

Onboarding Cost

After selecting a candidate, the...

We have talked about Flat Rate billing in various forms for several years now.  Dealers have often been reluctant to adopt it.  Many have questions about why and how.  The time is now for you to find answers to those questions.  The time is here for successful dealers to learn and implement Flat Rate billing.  Flat Rate is still not for everybody, and that’s okay. 

What is Flat Rate Billing?

There is no single Flat Rate offering. Flat Rate managed print, at its simplest, is a sales and billing program that bills customers a flat rate for the output every month.  This program makes it easy for the customers and the dealer as well. More complex and sticky Flat Rate models do more to manage-out unnecessary and wasteful printing and some even layer in workflow solutions that have nothing to do with print.  The critical factor is that you generate a fixed monthly bill for the client that is not dependent on the number of pages created.

What...

Office Equipment Dealer Nirvana

Nirvana in Indian culture is described as a state of perfect quietude, freedom, and highest happiness.  We are not going to talk about it in the religious sense, but we will look at it in the business sense. 

If I were a betting man, I would bet that you would not describe your business using those adjectives.  You would probably discuss it in the sense of turmoil in the marketplace and in the challenges you face. This blog may help you move toward a more nirvana-like state in your business.    

Current Situation

Both within your business and with your dealings with customers there are issues causing challenges that impact your customer’s happiness.  

Challenges for Your Customers

There are several areas in dealing with your company that your customers find less than desirable, no matter how hard you try. Let's discuss four that are probably at the top of their list.

Meter readings. If you surveyed...

What would you think if your service manager walked up to a newly hired technician who had never worked on equipment of any kind, and gave them a toolkit, and sent them on a service call?  You would probably be appalled and question their judgment.

No doubt you would tell the service manager that technicians need the training to learn how to use the tools, and how to service different brands of equipment.  Then you would spend a significant amount of money to make sure the technician has the skills they need to do their job. 

Why then do dealers often walk up to their best technician and promote to a management position, and then just turn around and leave them on their own.  I have seen this happen over and over again.  In the service management classes I teach, often there are managers with decades of experience that are just now receiving training on how to be effective as a manager.

The service manager in most dealerships is responsible for the...

On my first day working for a new employer, my manager was outlining what he expected from me in my new position.  I was starting my career as a District Service Manager for a major copier manufacturer.

 The mangers goal was for me to spend two days when visiting each dealer.  I was okay with that until it was explained that my bonus was based on the cost of a dealer visit and the number of dealer visits.  Now I am reasonably quick with math, and this was pretty simple; more dealer visits and less cost per dealer visit was how I maximized my bonus.

I told him he was paying me for one-day visits, and he said he wanted two-day visits.  I suggested that he change the bonus structure, and he said no.  For the entire time I worked for him, I did one-day visits and sometimes two in a single day.  I did what he paid me to, not what he wanted.

I challenge you to think about your business. Do you pay people to do something different from what...

One issue in this industry is the lack of recognition of the accomplishments in the service department. When I worked for one manufacturer, they would occasionally invite the service group in for a joint meeting with the sales group. There would always be an awards dinner. During that dinner, every salesperson that met the minimum quota would be called to the stage and receive an award. During that time, I exceeded every goal set before me and received nothing.  Events like this cause frustration and resentment.

This pattern permeates our industry. Salespeople win contests, go on trips, and get spiffs from the manufacturer. While not discouraging this process, I do believe that overlooking the service department creates resentment and is counterproductive. If we look at industry-standard models, service generates all of the profit in a dealership. Every sale to an existing customer is due to the quality of service they receive from your company.

In addition to service, there...

Disaster Plan: More Threats to Address

 Information Technology

In this disaster plan, IT is third on the list.  If your employees have communications and a place to work, then they will need access to the IT systems they use.  If your IT is on-premises, and the building is not available, you are going to need a list of the hardware that your system uses, and a valid full system backup to load on the replacement system.

If your system is cloud-based, you will still need network access to it.  How can your team get access, and have the bandwidth necessary to keep the business working?

If your system is cloud-based, do you have the technology in place so that an intruder can’t lock you out or steal client information?

People

One early priority is to determine if your employees are safe and in a safe place.  Once you know the status of your existing employees, you can start to work on taking care of clients. You may be in a position where you...

Every service manager is tasked with more work than they can ever complete. One of the challenges they face is dealing with the constant flow of information from their vendors. When I was a service manager I had a box on a table in my office where I put the printed bulletins as they arrived. I was always going to read and file them, but it never happened. Today digital files likewise need to be read and available as needed.  One way to help deal with this situation is a product specialist.

What is a Product Specialist

For this discussion, the term product specialist applies to a technician or a supervisor assigned to specialize in one or more product families. A product family is a group of models from one vendor that have similar properties. In many cases, one training class may cover three to five models, and this would be a product family.

Why You Need One

Every week, most manufacturers are releasing bulletins associated with the products they produce. Some of these...

In the last article, we discussed the cost of replacing technicians. Part of the cost we included was the cost of “bad hires.” The term bad hire would apply to any technicians that leave the company for any reason before they have generated enough profit to pay for the cost of hiring them. In the last article, we estimated it costs $40,900 to hire and train a technician. Let us discuss ways to improve the quality and probability of success in your hiring process.

Pre-Recruiting Process

One of the first questions to ask is, what kind of candidate are you looking for? Do you want to hire someone experienced? Or do you want to start from scratch? Another option is to promote from within. Each of these strategies has advantages and disadvantages. Depending on how urgently you need to fill the vacancy, the type of candidate you want will vary.

Starting from Scratch

The advantage of starting from scratch is that you can train the new technician to do the job according to your...